Is Your Firm's Culture an Asset or a Liability?

by Joel A. Rose

Recruiting and retaining top-quality rainmakers, as well as those myriad and influential attorneys who possess critical expertise in today’s “hot” practice areas, are two of the most critical challenges confronting managing partners and executive committees in today’s competitive environment.

In light of the numerous opportunities for such powerful and productive lawyers to join competing law firms, you and your fellow managers need to be especially cognizant of whether your firm culture, its management practices, and the presence or absence of appropriate strategic planning and marketing activities may finally drive lateral candidates to seek more lucrative and professionally rewarding opportunities elsewhere.

A firm’s culture may be its greatest strength for determining and achieving its immediate and long-term objectives. However, that culture may be its greatest weakness if it is bound to (1) outdated traditions (“because we have always done it this way”); (2) management styles that are dysfunctional and inconsistent with the desires and expectations of a majority of the partners and with the needs and priorities of the firm; or (3) outdated philosophies of senior or even departed partners that are inconsistent with the marketing and compensation programs required to compete aggressively with other financially successful, proactive law firms.

Danger Zone:

Absent the determined willingness of lawyer/managers to be sensitive to the changing needs of a firm, and the desires and expectations of its partners regarding the core values that guide the firm – including its methods for determining and implementing policies, as well as compensating its lawyers and engaging in strategic and marketing planning that will allow it to compete effectively with other law firms in its geographic area – the firm will have problems functioning in its practice environment. It may have difficulty surviving.

Among the warning signs:

(1) Partner complains or suggests that they are not being kept informed of matters that involve staffing, termination of attorneys, or specific developments that may affect particular partners or their areas of practice.

(2) Concern that they are being manipulated by lawyer management or a group of dominating partners.

(3) Exasperation at being assigned responsibility for performing administrative or substantive tasks without being granted adequate authority to accomplish them.

(4) Signs of unwillingness among the more influential partners to share the decision-making for the firm with other lawyers.

(5) Perceptions that, because decisions are being made by a select few, the partner meetings are essentially eyewash, as major decisions are made beforehand and that they are done deals in any event.

(6) Distress, exacerbated by this lack of open communications between the more influential partners and the rest of the attorneys, that they are always those other partners who seem to learn about decisions through the grapevine rather than from the decision-makers.

(7) The palpable sense that, since senior (or otherwise influential) partners consider the firm their private domain and take others for granted, there is simply a lack of concern about the status or feelings of other partners by some of these more influential partners.

(8) Resentment of a minority clique of partners who seem to see themselves as an entitled leadership elite, making decisions or engaging in activities that ignore or disregard the concerns, interests, wishes, or expectations of a majority of the partners.

(9) Built-up frustration at the perceived insensitivity to the personal and professional needs and priorities of partners, particularly as it manifests itself on a workaday basis, for example, delegating client matters at the last minute and expecting that the work be performed immediately or within an unrealistic time frame. Such expectations are especially infuriating when the matter has languished on the originating partner’s desk for some time.

(10) Discontent with unfair pay plans that allow the more influential partners to greedily manipulate the compensation system to suit their own purposes.

(11) Evidence of a lack of adequate planning for transferring client responsibility from the more senior partners to mid-level and junior partners, which often reaches a head with a fall-off in business due to an unanticipated and unplanned-for client departure, or the end of a significant matter that has kept several attorneys and staff fully occupied but with no plans for how to replace that business.

(12) A sense of tangible inequity when the more senior partners reduce their active involvement in business origination, work production, or firm management, without an concession to receiving a proportionately diminished profit share.

What Can Be Done?

Even at firms where such symptoms have apparently progressed to an advanced stage, it is often not too late to begin to institute a corrective program. That program must be predicated on three key words: Communicate, Communicate, and Communicate! In particular:

(1) Lawyer management should take particular care to assess the needs, requirements, and expectations of all of the other lawyers.

(2) Lawyers should be given the opportunity to provide input on relevant governance issues and to be kept informed about those activities that will influence the firm’s future.

(3) Have regularly scheduled meetings; announce the dates and times of these meetings far enough in advance to clear schedules; and hold them regardless of whether the more influential partners are present.

(4) Prepare an agenda for these meetings; request partners to contribute to the agenda; circulate the agenda prior to the meeting; provide background information when and where possible in advance of the meeting; prepare minutes or summaries of the meeting so that there will be a written record of the decisions reached; and finally, circulate these minutes to the partners for informational purposes.

(5) Encourage partners to speak out on various policy, financial, and operational matters that will affect the firm and its practice groups, presently and in the future, without fear of retribution by the dominant and more influential partners.

(6) Reach a consensus of a significant majority of the partners about the kind of culture that the want for the firm. Then, develop a plan detailing how to achieve these goals, with partner responsibility for putting practical components of the plan into action, along with designated dates for status reports and implementation.

(7) Ensure that the firm has a compensation system that is well-conceived and implemented and that rewards the positive efforts of partners and associates with incentives for them to perform those activities that will advance the firm in concrete and articulate ways.

(8) Provide all lawyers with the opportunity to grow, professionally and personally, by attending CLE, in-house training programs on substantive matters, and on a selective basis, by having them participate in administrative tasks in order for them to learn about managing aspects of the firm, consistent with the culture that has been formally articulated.

(9) Provide opportunities for the mid-level and junior partners (and associates) to participate in the orderly succession of firm management and to personally assume specific responsibilities for client development and retention. Be sensitive to the needs and concerns of the older lawyers and ensure that the current compensation system does not work at cross purposes with the firm’s ability to achieve these immediate and long-term objectives.

(10) Follow up on the progress of the firm and its components to ensure that cultural innovations are being maintained and reinforced by all lawyers.

(11) Be sensitive to the need to tweak elements of the firm’s culture in accordance with the priorities and needs of the partners, as required, to avoid problems down the road.

How effective a firm’s lawyer managers will be in achieving the kind of culture needed to encourage the partners to identify objectives and to develop and implement strategies to accomplish these goals will depend on their willingness and ability to develop and articulate shared values.

In addition to benevolent and well-meaning comments by firm management about what should and should be the prevailing culture, the results will depend on the attitudes shown by lawyer management just as much in what they don’t say. It will depend on how the more influential members of the firm respond to various situations with which they must deal. It will depend on how their interpersonal relationships with each other, members of the professional and administrative staffs, clients and the community at large, are perceived.